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EDHECinfra Research “highly commended” in the 2022 FT academic research awards

We are delighted to announce that the EDHECinfra research paper "An Infrastructure Investment Primer: From Valuation to Allocation and Manager Selection" published by N. Amenc, F. Blanc-Brude, A. Gupta & T. Whittaker in The Journal of Portfolio Management Private Markets 2022, has been Highly Commended in the FT Responsible Business Education Awards, in the category “Best business school academic research”.

Reading time :
24 Jan 2023

About the FT Responsible Business Education Awards

The FT Responsible Business Education Awards were created in 2021 to go beyond the business school rankings, to “ensure a wider variety of activities are analysed qualitatively to showcase, reward and incentivise individual examples of best practices”, says the Financial Times.

Three categories are highlighted:

  • Best student-led projects in partnership with external organisations that have had a societal impact over the past three years.
  • Best business school teaching cases or pedagogical resources published in the past three years with a focus on decision-making for sustainability or climate change adaptation.
  • Best business school academic research published in the past three years that addresses societal challenges, with evidence of positive impact on policy or practice.

In the latter category, in which the EDHECinfra work has been commended, the quality of the papers is assessed by a distinguished panel of judges who have strong expertise in the field, and are drawn from across the corporate world, non-profit organisations, academia and beyond.

>>> View the official announcement of all award winners here: Academic research award: tipping point for action.

About the highly-commended EDHECinfra publication

Over the past two decades, unlisted infrastructure equity investment has become a fully-fledged asset class, often with its dedicated allocation sleeve and asset managers or investment team.

In the commended publication, "An Infrastructure Investment Primer: From Valuation to Allocation and Manager Selection", EDHECinfra proposes an introduction to this relatively new and fast-changing asset class, in a context in which a shift in investor preferences in favour of unlisted infrastructure after 2008 led to a significant increase in asset prices. At the same time, Covid-19 lockdowns in 2020 and the normalisation of the yield curve from 2022 reminded investors of the underlying risks of these investments, increasing prudential and fiduciary scrutiny in the valuations and risk-adjusted performance of this asset class.

Noël Amenc, Frédéric Blanc-Brude, Abhishek Gupta and Tim Whittaker, the authors of the publication, draw three major conclusions:

  1. Unlisted infrastructure investment presents numerous performance measurement challenges due to the paucity of available data. However extensive data collection and advanced methodologies can palliate these issues and considerably increase the reliability and transparency of performance reporting and benchmarking.
  2. Unlisted infrastructure investment is not risk free and presents a number of equity-like and bond-like characteristics. The cash flows of infrastructure companies are resilient but not completely independent of the business cycle, while the price of risk for such cash flows is driven by market forces and by their exposure to duration and convexity.
  3. Unlisted infrastructure can play a powerful role in the portfolio as a diversifier, provider of yield, and as a liability matching or hedging instrument thanks to its high cash yield and duration. Beyond performance and risk measurement, the greatest challenge for investors is to achieve a well-diversified exposure to the infrastructure asset class in order to benefit fully from its investment characteristics. Manager selection and benchmarking are important part of this question.

“Make an impact” on the real-world

EDHECinfra is a venture of EDHEC Business School and a provider of indices and analytics for the infrastructure investment universe in which the majority of infrastructure assets are not publicly traded. EDHECinfra is the only research institute in the world with a sole focus on infrastructure investment and financing. Since 2016, EDHECinfra has produced more than 50 research publications on unlisted infrastructure equity and debt.

For the four authors and the institute, being recognised as researchers who produce “academic research with real-world impact” echoes with the very motto of the EDHEC Business School which lies at the heart of its 2020-2025 strategic plan: “Make An Impact”.

EDHECinfra has worked extensively with the Global Infrastructure Hub (GI Hub), the not-for-profit organisation formed by the G20. The current users of its data platform (infraMetrics) include EIOPA, Bafin, IAIS, the infrastructure working group of the G20, the Bank of International Settlements, the French transport authority and Treasury, the FCA of Denmark, the International Energy Agency, etc.

In 2021, EDHECinfra launched an ambitious new project: a $10M investment in creating scientific climate and social risk and impact metrics for infrastructure investors. With the support of the Monetary Authority of Singapore and Natixis, leveraging six years of experience collecting financial data and creating internationally recognised benchmarks for infrastructure investors, EDHECinfra is creating a new body of research and investment knowledge on sustainability and infrastructure investment.

About the authors

 

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